Why do we place these two headlines next to one another. Well, just for a little comparison to give us all an idea how much catching up regulated cannabis market has to do with the huge global black market. The Australian “Navy Daily” reports, “The seizure brings the total number of narcotics interdictions by HMAS Ballarat to nine over the period of her current deployment. During this time, Ballarat has seized over 9 tonnes of hashish “
Here’s the Aurora Story… https://www.barrons.com/articles/aurora-cannabis-marijuana-sales-51557880622
The similarity in the numbers makes a nice lead in to understanding what the regulated market is up against globally in terms of a competing and entrenched black market trading internationally.
Yes .. on the Canadian exchange Aurora is performing well….
Today’s value 15 May 2019
The company made 55.2 million USD in 2018 and has an estimated market cap of $1.6B acoording to Bloomberg (https://www.bnnbloomberg.ca/commodities/video/8-2m-sales-1-6b-market-cap-aurora-cannabis-investors-bet-big~1254628)
Yet they’ve only managed to produce an amount of cannabis that is as much as one deployed Australian Frigate has managed to seize in the Arabian Sea over the last 3 months.
Note the word “seize”.
Let’s think about how that might compare as a % to what got through . We guesstimate that seizures probably sit around 2-5% of what actually gets delivered to client, maybe 10% at the outside.
So…… one of the largest producers of regulated cannabis in North America has managed to produce as much cannabis as has been seized by one naval frigate on one particular cannabis trade route in the first quarter of 2019.
The positive spin might be, great, look at the growth possibilities in the market.
We’d err towards caution and take the stance that the regulation of cannabis as a global trading commodity is going to spend a very very long time in the black market and will need a great deal of reigning in. There are too many people making a very good living smuggling cannabis all over the planet.